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On Wednesday, incoming Mossad head Yossi Cohen, and Joseph Ciechanover, who has served as Prime Minister Benjamin Netanyahu’s special envoy to Turkey for the past five years, met with Turkish Foreign Ministry director-general Feridun Sinirlioglu to draw up the terms of the agreement that would put an end to the 2010 Mavi Marmara incident that led to a tailspin in diplomatic ties between the two countries, the sources said.

"If we had reached an agreement with Turkey two years ago, Israel would have benefited more," said the Zionist Union leader at an event hosted by Limmud FSU.

Herzog added that Jerusalem's relations with Ankara should be strengthened in other spheres and while the emerging deal was in the right step, it "must not give [Turkish President Recep Tayyip] Erdogan a foothold in Gaza."

"Netanyahu, as usual, shuffled his feet and acted out of panic [spurred] by [Yisrael Beytenu leader Avigdor] Liberman and other coalition partners and therefore the price is higher now," he said.

Meanwhile, former foreign minister Liberman also expressed skepticism over the deal with Turkey, calling Erdogan "the leader of a radical-Islamist regime."

"The deal with Turkey is not yet complete, but the damage has already been done," he said at the Limmud FSU event. "Opportunism is not a substitute for prudent and wise diplomacy."

He added that such an agreement aimed at thawing relations between Israel and Turkey would negatively impact recent trilateral efforts to boost regional relations between Israel, Greece and Cyprus.

"[The deal] will also hurt relations with Egypt because I can't see Erdogan waiving demands regarding Gaza, and any Turkish foothold in Gaza will come at Egypt's expense," he warned.

Liberman pointed to Turkey as untrustworthy player, noting the Turks engagement in trade with the extremist Islamic State group, invasion in northern Iraq against international law and diplomatic tensions with Russia.

Other Israeli officials largely welcomed the deal, but agreed Israel should stick to its guns when it comes to security and limiting of activity of some members of the Palestinian Islamist group Hamas living in Turkey.

"The expected agreement, which has yet to be concluded, gives us, on the one hand, what we demanded - a heavy limitation on Hamas activity in Turkey," Zev Elkin, an Israeli cabinet minister, told Army Radio. "We should not fold. We should not concede. We should stay firm on our interests."

Meanwhile, Energy Minister Yuval Steinitz said normalizing ties with Turkey had huge importance both to develop the Leviathan gas stake and to bring international energy firms back to Israel to look for new gas fields.

"I think that there is a serious, meaningful chance for thawing and normalizing relations between Israel and Turkey. I also think that this is proof of the diplomatic value of the gas and the gas plan," he said on Tel Aviv 102 FM radio.

The emerging agreement comes at a time of increased regional isolation for Turkey, which is in a bitter dispute with Moscow over the downing of one of Russia’s warplanes, is in conflict with most of its neighbors and is coming under international criticism for its troop involvement in Iraq and its trade in Islamic State’s oil.

According to the Prime Minister’s Office, the two sides met in Switzerland and came to the following understandings: Israel will establish a compensation fund to pay the families of the nine Turks killed on the Mavi Marmara when it tried to break Israel’s blockade of the Gaza Strip; all Turkish claims against Israel stemming from the raid will be dropped; Turkey’s ambassador will return to Tel Aviv, and Israel’s envoy will return to Ankara.

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